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With a kid on the way, Im looking into purchase term life insurance?
Are there any websites out there thats allow me to compare quotes from different insurance companies?
Id like to purchase a policy w/o a broker/middleman involved.
Me: 30 years old, Nonsmoker, plan to get at least 500k policy. Any idea on how much I should expect to pay.
Any tips/advice on what I should be watching for when purchasing term life? Thanks!
Suggestions:
1) LifeInsure.com (Doesn't require personal info)
2) Term 4 Sale
3) Insure.com
4) check with your alumni associations, credit unions, AAA, any groups at all that you belong to
5) Western & Southern
6) Selectquote
7) Moneynet UK (Compare Life Insurance Quotes in the UK)
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My approach to determining how much insurance I need
So my approach is
1. Figure out the level of income you need, without adding in one time expenses (like college)
2. Divide by .03 to figure out the total assets needed to support that level of income
3. Add in one time expenses (e.g. college for dependents)
4. subtract out current income / investment producing assets (e.g. subtract out stocks, but not the value of your house)
5. Use that number as the target for the amount of term life insurance you need
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Other discussions of return of premium policies:
Term 4 Sale - someone else recommended them on the forum and I used them when I bought term.
L0stman said:Term 4 Sale - someone else recommended them on the forum and I used them when I bought term.
Thanks, Just got some quotes. Which company did u end up going with?
Ohio National - they had the a good rating and the best price for the term / amount I desired.
"Shop Term based on Price" - but keep an eye out for quality hah.
intresting new producr i just got through aig its called "return of premium term life insurance" its equivalant to term however after 30 years i all my premiums back
mmy613 said:intresting new producr i just got through aig its called "return of premium term life insurance" its equivalant to term however after 30 years i all my premiums backPunctuation. It helps with the whole 'being able to communicate' thing....
mmy613 said:intresting new producr i just got through aig its called "return of premium term life insurance" its equivalant to term however after 30 years i all my premiums backIt is not equivalent. Search this forum and you will see you were taken
ellory said:mmy613 said:intresting new producr i just got through aig its called "return of premium term life insurance" its equivalant to term however after 30 years i all my premiums backIt is not equivalent. Search this forum and you will see you were taken
Really I was taken??
I’m glad you think so, however when deciding on life insurance, I concluded that the additional premium that I am paying for the “return of premium” vs. “standard term” will net me 30 years from now the equivalent of an approximately 8% compounded return TAX FREE.
To me that is very good return on my investment.
Show me another company with a similar credit ratings that will guarantee 8% returns tax free.
mmy613 said:Show me another company with a similar credit ratings that will guarantee 8% returns tax free.Sorry, but you are violating two of the most important rules of money:
1. Don't flush common sense (along with your money) down the toilet. If the returns you mention are true, why would all the other investment choices exist ? E.g., why would bankers make mortgage loans ? And if your insurance company is guaranteeing *you* 8%, they must think they have another investment that leaves them with profit after paying you, advertising, and all the costs of running the company ...
2. If it is too good to be true (more than double a CD), you are making someone else very happy -- at your expense.
EricGo07 said:mmy613 said:Show me another company with a similar credit ratings that will guarantee 8% returns tax free.Sorry, but you are violating two of the most important rules of money:
1. Don't flush common sense (along with your money) down the toilet. If the returns you mention are true, why would all the other investment choices exist ? E.g., why would bankers make mortgage loans ?
2. If it is too good to be true (more than double a CD), you are making someone else very happy -- at your expense.
What you are saying is that in theory it doesn’t make sense
I was skeptical to please help me by showing me where I went wrong
Pulling up a quote on insure.com for a 22 year old living in florida in the best of health for half a million dollars.
The best rate with an a++ company for:
30 year term is $33.69
30 year return of premium is 44.57
Total premiums for the return of premium is $16045.2 so after 30 years of paying 44,57 one would get back this amount TAX FREE
The difference is $10.88
Now 10.88 invested monthly at 8% with compounding interest after 30 years would be $16334.09
I apologize its not 8% its 7.912291%
I got pretty good term for a good price through my credit union. They have a group policy through CUNA Mutual.
mmy613 said:
What you are saying is that in theory it doesn’t make sense
I was skeptical to please help me by showing me where I went wrongI am saying that guaranteed 8% investment returns (after tax, no less !) do not exist. As to where the catch or the errant understanding lies, that is an interesting question. I am not sure, but here are a couple of thoughts --
1. The final premium quotes are different than what you have in hand. Either the ROP is higher, or the straight term is lower, or the small print is different. Perhaps AIG has set straight term at an uncompetitive rate, in order to make ROP look good.
2. Do you have any idea what the overall chance of not reaching end of term is ? I don't, but AIG sure does. 30 years is a long time, and any presumptions that you have of being obviously on one side of the median will be hard to justify.
I hope more knowledgeable people will post; in the meantime, common sense should prevail.
EricGo07 said:
2. Do you have any idea what the overall chance of not reaching end of term is ? I don't, but AIG sure does. 30 years is a long time, and any presumptions that you have of being obviously on one side of the median will be hard to justify.
Bingo! They factor in the possibility you stop paying on the policy. If you croak in year 29 they don't return the premiums to your estate.
HappyGuy said:EricGo07 said:2. Do you have any idea what the overall chance of not reaching end of term is ? I don't, but AIG sure does. 30 years is a long time, and any presumptions that you have of being obviously on one side of the median will be hard to justify.Bingo! They factor in the possibility you stop paying on the policy. If you croak in year 29 they don't return the premiums to your estate.There is also that group of people who simply forget to cash in. I'm also reminded of how many times I have missed a payment on an automatic bill by a few weeks, when I switch a credit card to a different number due to fraud or loss. I wonder if that would be enough to lose the ROP benefit.
EricGo07 said:I am saying that guaranteed 8% investment returns (after tax, no less !) do not exist..
How the return is tax free is simple, all they are doing is "returning my money"
EricGo07 said:1. The final premium quotes are different than what you have in hand. Either the ROP is higher, or the straight term is lower, or the small print is different. Perhaps AIG has set straight term at an uncompetitive rate, in order to make ROP look good...
From my experience and quote shopping their term rates were competitive however NO company could even came close to their return of premium rates
EricGo07 said: 2. Do you have any idea what the overall chance of not reaching end of term is ? I don't, but AIG sure does. 30 years is a long time, and any presumptions that you have of being obviously on one side of the median will be hard to justify....
Very valid and good point that I hadn’t thought of that gives understanding to how AIG can offer such rates.
If death occurs then it brings down their overall payout cost on other similar RoP policies.
However they DO NOT want people to die on these polices as the difference would be 16k payout for a live payout vs. 500k if one would die on such a policy
However when put into perspective that point to the consumer is mostly irrelevant since if one would die while having such a policy the payout would be half a million the consumer didn’t lose however the estate lost the additional (max of) 16K
However if one would live to that 30 year point he would receive that 8% return
And with any retirement investment SS etc one can ask what if one dies before reaching that point.
EricGo07 said:There is also that group of people who simply forget to cash in. .
A novel concept…. That we on FWF Benefit because of less savvy consumers.
mmy613 said:EricGo07 said:There is also that group of people who simply forget to cash in. .A novel concept…. That we on FWF Benefit because of less savvy consumers.Arrogance is bad for one's financial health. How sure can you be that in 30 years you will remember that the term policy has a ROP benefit ? Is there a window during which you have to apply for it ?
addendum: typo
EricGo07 said:mmy613 said:EricGo07 said:There is also that group of people who simply forget to cash in. .A novel concept…. That we on FWF Benefit because of less savvy consumers.Arrogance is bad for one's financial health. How sure can you be that in 30 years you will remember that the term policy has a ROP benefit ? Is there a window during which you have to apply for it ?
addendum: typo
I cant be sure but then why should I forget I know my bank account I know my investment etc (as well I get a monthly reminder for the next 30 years
I don’t know if there is a window of time or not however I would highly doubt that there is.
I do know that as of year 5 it starts creating a cash value that you can cash out at any time obviously not full RoP pr even close to 8% but never the less some cash value.
I purchased term and used one of the sites where you put in the info and it compares rates. It was either insure.com or term 4 sale. The quotes from different sites were the same for me. I wound up with aig through a third party in CA. It took a month for the physical and paperwork. I have not had to use it yet so I can not report on who is best. It was suggested to me by a relative to get the rider for coverage on my two teens for a few extra bucks so I did do that. good luck
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